Board Members may be personally liable for decisions made on behalf of the association or organisation – make sure you’re covered!
If you are a board or committee member of an association or not-for-profit organisation (NGO) you can be held personally liable for decisions made on behalf of that association. The consequences can lead to civil, or even criminal action. The continued safety of staff, members, suppliers and guests is paramount.
Associations and NGOs and their office bearers and employees may be exposed to a variety of risks arising from their services and the management of the association.
Many of these bodies run on a thin operating margin. A sudden liability or loss can, therefore, be devastating to the business, and subsequently compromise the personal assets of your directors and management team.
It’s vital you don’t take the risk of operating without the security of proper cover.
Golf Business Australia (GBA), one of Australia’s leading golf insurers, and industry leader in EHS (Environment, Health & Safety) management epar have combined forces in an effort to protect against such risks present to associations
and board members.
WHAT IS ASSOCIATION LIABILITY?
As a board or committee member, you are at risk of expensive litigation arising from the provision of services to their members or the public. You may also be at risk of increased litigation costs and corporate governance requirements.
Once an association or organisation is registered, its separate legal status, property, rights and liabilities continue until the company is officially deregistered by ASIC. However, even after the business has ceased trading and has been deregistered, obligations as a board or committee member may continue.
A fundamental duty of a company director is to cease trade while a company is insolvent. Therefore, under certain circumstances, directors may be personably liable for debts incurred by the company if the company is unable to pay those debts.
So how does this happen?
Well. Directors of a company in financial distress generally appoint an administrator. This administrator may subsequently put the company into liquidation. The liquidator then alleges the directors have allowed the company to trade while insolvent during the six months leading up to the administrator’s appointment.
Defence costs and the directors’ personal liability in such cases have the potential to reach a 7-figure sum.
Common signs of insolvency include:
1. Low operating profits or cash flow from the business
2. Problems paying trade suppliers and other creditors on time
3. Trade suppliers refusing to extend your business further credit
4. Problems with meeting loan repayments on time or difficulty keeping within Overdraft limits
5. Legal action taken, or threatened, by trade suppliers or other creditors over money owed to them.
RISK AVOIDANCE & PROTECTION BY EPAR AND GBA
Worker’s Comp claims are on the rise due to COVID19 are an area to focus on mitigating. We must always ensure a safe work environment and have all staff undertake regular training on all aspects of Coronavirus safety. Keep records of their attendance.
The joint effort on risk avoidance (Epar) & protection (GBA) provides clients with expert advice on, and access to, premium coverage options offered by industry insurers.
Epar and GBA can with help of their combined expertise, help provide protection to the individual member and the association against wrongful acts in the management, employment practices liability and fidelity.
By seeking risk avoidance and protection, Epar and GBA can advise you on a policy which covers your association or organisation against legal costs that can arise from allegations of misconduct, breach of duty or mismanagement.
These types of covers are designed to protect entities and their directors and officers by offering multiple coverage sections, including but not limited to;
1. Employment Practices
2. Directors & Officers Liability
3. Professional Indemnity
4. Tax Audit
5. Fines & Penalties
6. OHS Defence Costs
However, it’s important to note that insurance does not replace the need for risk management and best-practice governance to avoid occurrences.
Additional Stand Up Talks from epar:
Golf Business Australia (GBA) is the fastest growing golf industry insurance and finance provider in the country. Last year, GBA teamed up with Epar to deliver an end-to-end risk solution for its partnering golf clubs.
Every golf business has a unique risk profile – let Golf Business Australia customise a plan that works to protect your assets and revenue.
Our premium range of golf insurance products aim to offer total golfing peace of mind – whether you are looking for golf insurance for your golf equipment, insurance cover for your buggy or that all important on-course third party liability protection, GBA has got you covered!
epar is a team of EHS experts who can provide your business with a complete EHS management solution.
epar has managed and revolutionise the complex world of environment and safety management since 2003, and are unique in the level of advanced research and development relating specifically to a sustainable workplace.
epar has quickly become a leading provider of EHS management solutions within Australia and internationally, with an experienced team who are passionate about ensuring businesses understand their legal responsibilities, and are practically achieving their goals.
At epar it starts with the best team and the best compliance materials and carries through to the best software and document design and better delivery methods – all with the philosophy that their customers deserve the best.
Because every golf business has the potential for greatness.
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